Bernanke Pledges Cooperation on Transparency, Issa Aide Says

Federal Reserve Chairman Ben S. Bernanke
Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Hannelore Foerster/Bloomberg

Federal Reserve Chairman Ben S. Bernanke today pledged to “work cooperatively” with the new head of a House panel who’s seeking to increase disclosure of the central bank’s actions, the lawmaker’s spokesman said.

Representative Darrell Issa made it “very clear” in a private meeting with Bernanke that the lawmaker will pursue “an overall agenda intent on making government as transparent as possible,” said Kurt Bardella, spokesman for the California Republican who’s set to chair the House Oversight Committee in January. “Chairman Bernanke certainly signaled that he would be a willing partner in that effort.”

Bernanke didn’t promise any specific changes in the meeting, held at his request on Capitol Hill, Bardella said. Issa’s efforts will be part of intensified scrutiny of the Fed in Congress, where Texas Representative Ron Paul, a Republican who advocates abolishing the central bank, will take over a Financial Services subcommittee overseeing the Fed.

“We certainly believe that Chairman Bernanke was genuine in his outreach and genuine in his desire to work with us to advance our transparency agenda,” Bardella said in a phone interview. “We take him at his word that he was sincere in saying that he wanted to be collaborative, that he wanted essentially a partnership with us.”

Michelle Smith, a Fed spokeswoman, declined to comment.

Before the meeting, Issa said in an interview with Bloomberg Television that he is concerned the central bank under Bernanke is becoming “much more” of an “activist Fed, one that is taking on obligations without appropriations.”

Lag Time

Issa said last week he will consider whether the five-year lag time for the release of transcripts of Fed meetings should be shortened, and he reiterated his concern about the delay in the interview today. His proposal comes amid rising criticism of the central bank by Republicans, who won control of the House in November elections.

John Boehner, the presumptive House speaker, and three other Republican leaders have criticized the Fed’s plan, announced a day after the election, to buy $600 billion of assets to boost the economy, saying it risked weakening the dollar and fueling asset bubbles.

Today, Bernanke “reiterated his pledge and commitment to be transparent and to certainly make available to Chairman Issa and our committee answers to questions that we have or will have in the future about the Fed’s activities,” Bardella said.

Issa, now the senior Republican on the oversight panel, also met privately Dec. 2 with Kansas City Fed President Thomas Hoenig, who was in Washington for a separate meeting with House Republicans.

More Transparency

The prospect of increased transparency follows last week’s release by the Fed, under orders from Congress, of documents naming recipients of $3.3 trillion of central bank aid during the financial crisis, along with details including the amounts of loans, interest rates and dates.

Fed officials are considering steps of their own to increase transparency, possibly including regular press conferences by Bernanke. He is the only head of a major central bank who doesn’t give media briefings to explain actions and projections.

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